California Wine Country credit unions see 42% jump in members, 16% rise in loans

Nine credit unions based in the North Bay raked in 23,300 new members as of June 30 from a year before, reaching a record high, a trade association second-quarter survey showed.

Membership rose 42% in that time to 586,000, a windfall beating out the 444,000 reached in 2012 for the same April-to-June quarter, according to the California and Nevada Credit Union Leagues.

It reported that the lending business churned out an even greater return, rising 16% to $7.9 billion between the nine credit unions. This increase dwarfed 2010’s high mark of $2.6 billion by 204%.

For lending, mortgages led the way with a 38% increase, amounting to $3.7 billion. The record figure pummeled 2009’s $639 million quarterly total, the Leagues added. Home equity loans and new auto loans saw a collective decrease by 10% and 5%, respectively.

The credit unions encompassing Sonoma, Napa, Marin and Solano counties include Redwood Credit Union, Community First Credit Union, North Bay Credit Union, Travis Credit Union, Befit Financial Federal Credit Union, Marin County Federal Credit Union, Silverado Credit Union, Sonoma Federal Credit Union and Solano First Federal Credit Union.

Leagues spokesman Matt Wrye said the industry advocacy outfit wasn’t all that surprised by the substantial growth.

“On the other hand, we could have never foreseen the immense size and dramatic increase in aggregate lending and deposit growth,” Wrye said, singling out the Paycheck Protection Program as a reason for a surge in commercial lending.

The organization attributes much of the rising business in those divisions due to federal stimulus and lower interest rates “cushioning the economic and job fallout,” a notion backed by the chiefs of a few Wine Country credit unions.

“Low interest rates have contributed,” Redwood Credit Union Chief Financial and Risk Officer Ron Felder said.

Felder said the North Bay’s largest credit union grew 7% in membership and doubled that%age in loan business, including 2,100 PPP loans intended for businesses to maintain their payrolls.

“People were going crazy getting their applications in,” he said.

The Santa Rosa-based credit union also allowed for a “pausing” on loan deferments, which moved the customers’ payments to the end of the loan periods by moving back the maturity dates.

Plus, savings- and checking account balances are up, as Americans stashed money away during the shelter-in-place orders.

“And we’re still seeing growth,” Felder said, referring to the third quarter.

His Santa Rosa neighbor, North Bay Credit Union, also reported notable growth in line with the Leagues’ findings.

“Things are going very well. We’re performing higher than average,” CEO Chris Call said.

The credit union even added 10 staff positions with some shifting to handle the demand.

Call’s company absorbed a “sharp” increase in lending and assets characterized by deposits by 20% compared to 2019. Membership growth went up by half the%age.

“All of sudden it seems like people are being more prudent, saving nest eggs,” he said of rising deposits.

Community First Credit Union CEO Todd Sheffield in Santa Rosa said, “What we experienced in the second quarter is a lot of inflows of deposits.”

Even the unemployed took part in stashing away money for a rainy day, which consequentially arrived. The $600-per-week enhancement to unemployment insurance helped with those deposits as members shied away from spending as much, Sheffield pointed out.

When members did spend, they were smart about it with low interest loans to either refinance existing homes or buy new ones.

“We processed a ton of home loans,” Sheffield said.

He noticed a dip in auto loans in the second quarter, but the following three-month period improved dramatically to $14 million as people “got back to buying cars.”

Sheffield confirmed the third quarter looks stronger than the second for loan production as the credit union assesses the period.

Still, the credit union is earning its membership by working to maintain the financial integrity of those struggling and uncertain about the effects of the coronavirus outbreak.

“We do have a number of members that haven’t bounced back from the shelter-in-place (orders). We work with them every day, deferring or adjusting payments until they can get back on their feet. Fortunately, they are not in a number large enough to swamp us,” Sheffield said.

Susan Wood covers law, cannabis, production, as well as banking and finance and residential real estate. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com